Alibaba, Tencent boost investments in Southeast Asian market

Alibaba and Tencent are expected to dominate the Southeast Asian market with billion dollar investments.

Alibaba and Tencent, two of the biggest business entities in China, continue to invest in the Southeast Asia (SEA) market. Their recent investments show the power duo's rooting interest in Southeast Asia's fast-growing startup ecosystem.

A venture capitalist said Alibaba and Tencent are very keen to boost its expansion in Southeast Asia. Vinnie Lauria, co-founder of Singapore-based VC firm Golden Gate Ventures told TechCrunch: "Through their investments and acquisitions, it's very clear that Alibaba and Tencent are interested in Southeast Asia. They share our vision, that this region is ripe for opportunities in the e-commerce, payments, and marketplaces space".

A Google report said Southeast Asia currently has 280 million internet users with 3.8 million are going online each month. This figure is expected to balloon to 480 million by 2025 and US$200b worth of web-based profit.

The publication reported that both Chinese giants "have held discussions with at least a dozen startups that operate in Southeast Asia's e-commerce or fintech space".

After the US$1b investment in Southeast Asia's Amazon counterpart Lazada, Alibaba continues the search for potential firms in the region to acquire and invest in. According to Lazada chief executive Max Bittner, Alibaba's investment will be used to expand the services of the e-commerce site and enter more markets in the region. Lazada is currently operating in six SEA countries only: Singapore, Indonesia, Malaysia, Vietnam, Thailand, and the Philippines.

"We're found the right balance between us having the freedom [for our business] and falling back on Alibaba as our big brother willing to help us when we need it", says Bittner in an interview with TechCrunch.

Alibaba has also been pouring out its investments to the fintech sector through its financial services subsidiary Ant Financial, formerly known as Alipay. So far, it has signed a US$1.2b deal with US Moneygram and US$200m with South Korea's Kakao Pay. On top of those, it has done separate deals in financial service firms in Singapore, Thailand, Indonesia, and the Philippines. Alibaba also has reopened talks with online insurance site Compare Asia Group for a US$50m investment.

Tencent, on the other hand, has invested US$19m in a joint media venture with Thailand-based Ookbee while it has a long-standing investment with another Thai media corporation Sanook. The financial service firm has expanded as well to Joox, a free-to-play music streaming service, and Smule, a karaoke app.

There are still more investments and acquisitions coming up for Alibaba and Tencent down the road. Alibaba is expected soon to become a part of a group of investors for Grab, Southeast Asia's counterpart for Grab.